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Monday Jul 18, 2022   
A couple of weeks ago one of the Newsletter alluded to the Portland City United (PCU) 04 Boys soccer team (my son plays on this team – most of them seniors) winning the US Soccer West Regional tournament which stamped their ticket to Nationals.  That time has arrived given that the 16 players, two coaches and me (team manager) boarded a plane on Sunday morning and were destined for Orlando, Florida where they will be participating in what is called Group Play Tuesday through Thursday.  There are four brackets where the top team in each advanced to the semi-finals on Saturday for the chance to play in the finals on Sunday.  Their match on Wednesday evening (6:00 PM EDT) will be live streamed on ESPN 3, which is exciting for all relatives and friends who cannot make it ... » read more
Friday Jul 15, 2022   
The past week has been a volatile one within the Lone Star State as Mother Nature continues to blanket the region with the 'heat dome' pattern that was seen last spring/summer in the Pacific Northwest.  Starting last Sunday, ERCOT issued a news release calling for conservation during the afternoon/evening periods as the week was about to get started.  The announcement was brief but to the point as it cited extreme heat and record-breaking demand as the reasons for conservation but behind the scenes the ERCOT system operators also had one eye on the supply situation as any disruption to the resource stack would cause concern that has not been in play since Storm Uri (February 2021 Cold Snap). Figure 1 | ERCOT Conservation Appeal from 7/10/22 Yesterday, we published a special ... » read more
Thursday Jul 14, 2022   
ERCOT was faced yesterday with a large escalation to the pattern of scarcity and spiking electricity prices, as the real-time SPPs ran up to the $5,000 price cap mid-afternoon and remained there for several hours.  Leading up to yesterday, the system operators saw Monday’s day-ahead auction clear rip to levels not seen since the tail end of Storm Uri as prices cleared north of $650 across the heavy load block. With conservation alerts sent via the ERCOT message board, on television and via every mobile phone application, the word was out that every megawatt would matter when it comes to balancing the system.  The figure below shows ERCOT’s real-time price map, captured at 4:50 pm.  The deep red color covering almost the entirety of ERCOT’s territory is an ... » read more
Wednesday Jul 13, 2022   
The power burn numbers for July 12th topped the 49 BCF mark, which is quite impressive given that a few days ago we were looking at levels settling between 43-45 BCF per day.  If you take into consideration that the Midwest, Ohio Valley, and Northeast are taking a bit of a sabbatical from the warmer temperatures that smothered the area in June and the start of July.  This gets the market thinking about where things could go from here if the mentioned regions start re-enter into the realm of warmer temperatures. Figure 1 | PJM Peak Power Demand Actuals and Forecast – Daily The image above is that of PJM’s daily peak power demand levels in aggregate and broken down by specific regions.  The bars in the left image represent the forecasted values while the dots ... » read more
Tuesday Jul 12, 2022   
Typically when we hear the phrase "Dog Days of Summer" we think of lazy dogs trying to stay cool by laying around in the shade on the hottest days of the year. It makes intuitive sense but the phrase has a deeper origin going back to Ancient Greece. The Greeks noted that the constellation Canis Major, or Greater Dog, was present in the same region as the sun during the summer months. Heat associated with this time of year became synonymous with the Dog Star, Sirius, which is the brightest star in that constellation. The Ancient Greeks used to believe that the Dog Star got its brightness from the sun propagating the belief that warmth was associated with dogs. Nobody looks at constellations any more so it is easier for modern society to think of lazy pets. The peak of summer is upon us. » read more
Monday Jul 11, 2022   
ERCOT has a lot going on as we enter the first full week of July as the day-ahead auction clears topped the $625 mark across the heavy load block of hours.  This is the highest average auction print we have seen since the week of Storm Uri, back in February 2021.  Such auction results have move the ERCOT system operators even closer to the edge of their seats as the grid’s supply is going to be essential to keep the lights on later today and if the latest 15-day weather forecast holds, the balance of the month is in question. Figure 1 | ERCOT Day-Ahead Auction Clears – Heavy Load We discussed this situation in the most recent EnergyGPS ERCOT market flash, which is a part of our ERCOT Power Package we offer to clients with interest in the Lone Star State’s ... » read more
Friday Jul 8, 2022   
If I were in charge of carbon policy I would implement a “tax and refund” mechanism as outlined in the book “Carbonomics” by Stephen Stoft. A carbon "tax" sends a clear and stable price signal to industry considering making investments in carbon reduction. The “refund” part makes it revenue neutral by distributing the carbon tax proceeds back to taxpayers. But I’m not in charge and the carbon programs in the US tend to be a version of cap and trade. Both systems use a combination of government and markets to achieve a solution. Under a carbon tax, the government sets the price of carbon and the market determines the volume of carbon reductions that can be achieved at that price. Under a cap and trade program, the government sets the volume of ... » read more
Thursday Jul 7, 2022   
Any discussion of power markets in the West is likely to turn at some point to the hydro systems present.  In CAISO, hydro generation represents a small but important segment of the supply stack with anywhere between 1.5 and 5 GW available on average in a given day, depending on the season and water how plentiful the water year is.  In the Pacific Northwest the hydro system is crucial, accounting for a huge portion of the demand in the area.  For example, earlier this week on Tuesday, hydro generation in the Northwest averaged 18.5 GW over the heavy load hours, whereas load averaged just 200 MW higher at 18.7 GW.  Even with the differences in relative sizes of hydro in California versus the Pacific Northwest, there is one thing both had in common leading up to the ... » read more
Wednesday Jul 6, 2022   
The 4th of July celebration are now over, and it is time for the summer family vacations to be in full swing as the September is right around the corner and the classrooms will be full once again.  Traveling is not what it used to be as airlines are dealing with staffing, planes with unplanned maintenance and the simple fact that entire operation falls under the umbrella of supply chain shortages on all fronts.  Figure 1 | Cancellation Policy - Airlines Sticking with the airlines, the one thing we are learning about firsthand is how unclear the cancellation policies amongst the different flight entities as stories are plentiful around days of waiting for the next flight to one’s destination where sleeping on the floor of an airport gate is the only option.  The chaos ... » read more
Tuesday Jul 5, 2022   
While temperature has and will always be the main driver of electric demand for the Lower 48 grid, it does not always give the best estimate for power burns. As the resource dispatch becomes more reliant on intermittent renewables generation the gas demand forecast has become more volatile due to wind and solar sensitivity. The problem is that when temperatures are at extreme conditions and renewables output falls it puts the grid at risk because the swing supply is pushed into natural gas. There is a lack of portfolio effect in the resource mix. This week ERCOT is likely to see another summer peak demand record and on top of it it will happen without the aid of the increased wind generation. That should push natural gas burns to their all time highest level as all assets are brought on ... » read more
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